“Secret documents show creditors’ baseline estimate puts debt at 118% of GDP in 2030, even if it signs up to all tax and spending reforms demanded by troika. […]

The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery. They show that, even after 15 years of sustained strong growth, the country would face a level of debt that the International Monetary Fund deems unsustainable.

The documents show that the IMF’s baseline estimate – the most likely outcome – is that Greece’s debt would still be 118% of GDP in 2030, even if it signs up to the package of tax and spending reforms demanded. That is well above the 110% the IMF regards as sustainable given Greece’s debt profile, a level set in 2012.”

“Meanwhile, the newcomer to Greek politics, Syriza, has been told it will only receive the funds agreed under the previous bailout terms if it is ready to implement further policies that will decimate the poor and impoverish the middle class even more. Cutting pensions, many of which are already below the eurozone average when almost one in two of them are facing poverty, would be a mistake.

So would conceding to the firing of an additional 150,000 public sector workers when their overall headcount has already been reduced by 161,000 since 2010 – a 19% reduction, according to the IMF.

Contrary to popular belief, the number of public sector employees as a percentage of the workforce in Greece is 14% below the OECD average, but austerity has had an even more disastrous impact on employment in the private sector, with an estimated 400,000 businesses closing down in the past five years.”

“Former International Monetary Fund (IMF) European Department Director until 2014 and supervisor of Poul Thomsen, Reza Moghadam, requested the write-off of half of Greece’s debt. In a letter to The Financial Times on January 26, the current Vice Chairman for Global Capital Markets at Morgan Stanley, admitted that both Greek bailout programs of 2010 and 2012 were designed based on optimistic assumptions on growth, inflation, fiscal efforts and social cohesion.[…]

Taking the above in account, the former IMF official proposed a generous haircut in exchange for reforms. Should the debt be less than 110% of GDP, as agreed in 2012, then it will become sustainable. What is needed, Moghadam concluded, is for Europe to overcome its taboos on debt relief.”

“And, sure enough, what we are seeing now, 16 years after the eurozone institutionalised those relationships, is the antithesis of democracy: many European leaders want to see the end of prime minister Alexis Tsipras’ leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.”